CEOs with large, global supply chains should consider these tips on fostering communication and collaboration between marketing/sales and other operational functions that make and fulfill orders.
If you are a C-level executive with major responsibilities at a company that has a large, global supply chain, you understand the pressures of finding ways to optimize a supply chain for a global market that can be unpredictable at the same time that it demands faster times to market for goods and services.
CEOs at these companies have been tackling these issues with great rigor by forming partnerships with key suppliers, evaluating the inherent risks in their supply chains and planning for them, carefully designating where inventories are going to be warehoused, and finding ways that they can most inexpensively and efficiently use logistics to get goods to market. Many have also moved to cloud-based supply chain "networks" that allow for social media-style dialogues with suppliers and business partners to resolve major supply chain issues and problems when they occur.
Yet, major internal barriers to the exchange of critical information persist despite the use of new supply chain technologies and enterprise resource planning (ERP) systems.
"What we find when we talk to companies with supply chains is that there is a fundamental 'disconnect' between the marketing and sales function and those that must produce and fill the orders, like manufacturing operations, warehouse distribution, and order fulfillment," said one supply chain solutions vendor.
Here are several key disconnects between marketing/sales and company operational areas that hamper organizations.
- The Master Production Schedule: Manufacturing's production of goods has historically been driven by the Master Production Schedule that manufacturing planners input with forecast information. Often, these manufacturing planners rely on past company production levels and annual projections from sales to develop what production requirements are "most likely to look like" (based on past history). If there is a mid-year market change or a new product launch that marketing plans, this information is often not relayed to manufacturing in a timely fashion, which forces manufacturing and other departments that are "downstream" from marketing/sales to scramble so they can meet order volumes.
- The order fulfillment process: The people who fill the orders, now more than ever, are likely to be in distribution centers and warehouses. When they see an increased order volume, they try to come up with extra resources, but these efforts can't make up for inventory shortfalls due to an incomplete Master Production Schedule; consequently, orders get delayed and must often be back-filled, leaving customers disappointed. If the warehouse, manufacturing, and other production and fulfillment functions had been apprised in a timely manner about a marketing campaign or a new product promotion, they could have been better prepared to handle an order spike.
- The return process: Sales and marketing functions are rewarded on the success of campaigns and on the raw revenues (sales) gained. If there is a problem with a product and product returns eat into the initial revenues, there is a tendency for marketing/sales to not view a product defect as "their problem." In reality, returns become a sales and marketing problem because dissatisfied customers can choose to take their future business elsewhere, so marketing and sales should be integrally involved.
All of these factors make it essential for CEOs to facilitate active communication and collaboration between marketing/sales and other operational functions that make and fulfill orders.
How to foster seamless cooperation
1. Insist on collaborative planning
On an annual basis, most marketing and sales departments plan product launches and promotions. These plans most often come up in annual budgeting when they ask for money to fund these campaigns. As an extra step during the budgeting process, marketing/sales and manufacturing/distribution/customer service functions should all be jointly present to work on and understand these campaigns -- and the operational resources that will also be needed to carry them out.
2. Develop an order feedback system
Salespersons don't need to "step in a hole" that might have already been created by customer dissatisfaction and active returns of a product. Instead, back end order fulfillment functions should be communicating returns and customer dissatisfaction information aggressively to sales/marketing so these areas can be aware of any potential "tough sledding" they might have to contend with going forward.
3. Set an example
Corporate departments are less inclined to go off on their own and only accept responsibility for their immediate areas when the head of the organization demands more accountability. CEOs who demand organizational accountability and teamwork will get it -- but often at the price of first overcoming the historical "disconnects" between major functions in the company that their "best in class" competitors have already learned to master.
Post your feedback
If you have encountered these types of communication issues between marketing/sales and ops, what approaches worked for your company? What strategies were attempted that didn't pan out? Share your experiences in the discussion.